ECONOMY

Market in a state of shock from supply problems, energy hikes

Retailers and importers struggle to get the materials they need, while energy costs are soaring

market-in-a-state-of-shock-from-supply-problems-energy-hikes

Greek businesses are facing a turbulent return to normality after the lockdowns, due to unrest in the supply chain and huge hikes in energy costs. These two factors are leading to both price increases and shortages of goods in the market.

Entrepreneurs realize that the prices of products and raw materials arriving from China – if they come – are between 20% and 50% more expensive than before. The shortages are already being observed in certain sectors, and are likely to grow as next month’s Black Friday promotional event approaches – let alone the festive season in December.

“Some 70% of small and medium-sized importers have given up trying, in other words they have ceased ordering imports from China,” says Dimitris Karamalakos, president of the Federation of Independent Importers, Representatives and Distributers’ Associations (OSAEA). He notes that besides shipping costs, the price of plastic, chemicals etc have also soared.

However, the biggest problem Greek businesses are facing is energy costs: Natural gas rates have rocketed compared to the beginning of the year, dragging the cost of electricity higher too. That situation isn’t seen changing anytime soon, as Asia claims ever greater quantities of the fuel.

Data show that the wholesale rates of electricity have increased by 164% from last year, mainly due to the 400% jump in natural gas rates. International markets further appear to factor in the extension of this crisis well into next year, covering at least its first quarter.

In this context the government in Athens is seeking the necessary resources in order to expand its energy subsidies for households to seven months – i.e. at least up to April 2022.

The market’s great concern is the possible swelling of unpaid dues, as everyone is aware of the difficulties households and enterprises may face being charged twice as much for their power, even if that concerns reliable customers, as by April they could have to pay at least four swollen bills.